Monday, May 17, 2010

How to deal with dilemmas.

Post 489 - As F. Scott Fitzgerald has pointed out, “The test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time and still retain the ability to function.” This is the essence of the problem many managers face today when dealing with dilemmas. A dilemma is a pair of apparently contradictory goals both of which are valuable to the organization. These goals are in tension in that moving one goal ‘up’ tends to move the other goal ‘down.’

Many dilemmas are improperly characterized as problems. Geoff Ball and Jerry Talley at Edgewise Consulting suggest that some 25-50% of all organizational conflict is caused by unacknowledged and unmanaged dilemmas. The results is blaming, whining, finger pointing, and threats, but no positive acknowledgement of how these conflicting goals are connected together. So, unmanaged dilemmas fuel interpersonal conflicts and heighten interdepartmental friction. People caught up in dilemmas are likely to feel that some other group in the firm routinely undermines their best efforts. Yet, they’re unaware that their own efforts also often lead to someone else's setback and pain.

People tend to believe they must choose one goal or the other, as if they’re polar opposites. Yet, since both sides of a dilemma are potentially valuable and necessary, it’s a mistake to sacrifice one for the other. For example, what company can continuously avoid longer-term investments in order to assure short-term profits? Or visa-versa?

When dilemmas are managed poorly, some of the costs are: * Time spent arguing with other departments with no useful outcome. * Employees feel unappreciated. * Productivity is reduced because of lowered morale. * Departments take unilateral action leading to confusion and resentment. * The company appears disorganized to customers. * Lost sales and lost referrals.

On the other hand, if dilemmas are managed well, companies experience: * Synergy of efforts between departments. * They beat the competition with breakthrough ideas and products. * There’s high customer satisfaction for quality work delivered on time.

Here are some typical business dilemmas:

- Innovate or Conserve.If you don’t invest in innovation, current business will eventually decline. However, if you invest too much too soon, this may endanger the continuity of your current business.

- Do It Yourself or Outsource.Do you handle production by yourself or do you leverage the capability of third parties? Internet marketplaces are successful examples of the latter. Both approaches require different competencies. If you choose to focus on your core business, where could you benefit from outsourcing to third parties?

- Support or Lead.You could choose to be the leader of the market or you could be happy supporting others. And there are many possibilities for each.

- Cooperate or Compete.Many companies value teamwork, but they organize people’s activities in a competitive way by setting individual goals and targets. Can you find a way that balances both?

- External or Internal Focus.This dilemma is present in most organizations. Marketing and sales tend to be externally focused, while IT and administration concentrate on streamlining the company’s internal activities.

- Consumer or Specialized Company.This dilemma is less important for managers if their context is already set. It’s more important for startup entrepreneurs. Dealing with twenty clients is very different than attracting 20.000 demanding consumers to your business. It’s important to make this choice upfront.

It’s best to be open about the way you manage dilemmas. Therefore, some companies have issued statements that clarify their position in a number of difficult areas to provide guidance in dealing with these situations.